The potential for biodiesel to replace diesel has been explored as an alternative fuel for naturally aspirated indirect injection diesel engines. Overall biodiesel smoke emissions were significantly reduced compared to diesel fuel, which was approximately 36% lower at 2000 rpm, peak load conditions. And torque, power and brake energy consumption did not show much difference. However, compared to diesel fuel, NOx emissions from biodiesel have increased. To combat this problem, an EGR(exhaust gas recirculation) method has been applied to reduce NOx emissions. It was confirmed that simultaneous reduction of NOx and smoke was confirmed by cooling EGR method(10~15%) and biodiesel(20 vol%).